Posted
by
kdawson
on Friday December 10, 2010 @05:52PM
from the something-about-crime-and-time dept.

Readers twoallbeefpatties and ngrier wrote in essentially simultaneously about the guilty verdict in the trial of former Goldman Sachs computer programmer Sergey Aleynikov. We've discussed the case severaltimesbefore. The trial itself was sealed from the public to prevent discussion of GS's high-frequency trading system. Reader ngrier summarizes: "After just three hours of deliberation, the jury found Sergey Aleynikov guilty of intentionally stealing proprietary Goldman Sachs code. As he had admitted copying the code as he was preparing to join a startup competitor in 2009, the case hinged on the intent. He faces up to 10 years in prison."

High frequency trading actually facilitates more accurate pricing of securities because of the liquidity it introduces to the market. The benefit of accurate pricing is hard to explain fully without getting deeper into the economics of markets, but it's definitely there. The animosity you raised is probably due to a perceived lack of contribution (no tangible products produced). But actually, facilitating better pricing will route investment into areas that deserve it (e.g. to the guy who produces 2 potatoes per unit resource instead of 1.5 potatoes). The sum effect of these actions is a raised social utility.

You've been lied to. It's a bit like saying that the guy with the X-ray specs who wants to play poker is good for the game because it means that you don't have to wait for somebody else to fill out the quartet.

The problem is that while he does indeed have money, he also has X-ray specs which allow for him to have an unfair advantage over the other players.

High frequency trading is ultimately a scourge, the mechanic they use is a bit of sleight of hand to take advantage of momentary price fluctuations which leave them in the position where they're able to slam in an order for a guaranteed future profit, where other investors are locked out. It's something that I could do as well, if I were told what the price would be in the future and had the means of slamming in a bid in time to capitalize on it. There's little value to that sort of high finance piracy.

Even without that behavior, there's plenty of liquidity, the high frequency trading tends to target portions of the market, not the market as a whole, and even smaller trading stocks, there's typically plenty of liquidity for reasonable players.

The problem is that while he does indeed have money, he also has X-ray specs which allow for him to have an unfair advantage over the other players.

To emphasize this point, here are quotes from an article last year [nytimes.com] on this same story:

Loopholes in market rules give high-speed investors an early glance at how others are trading... some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds -- 0.03 seconds -- in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

Thats plain evil. But even without that you can do this type of trading based on the limiting speed of light. If you are geographically well positioned you can beat out the market by a couple miliseconds.

"The unethical practice of a trading ahead of your client based on knowing how your client is going to trade"

In plainer English - it means that the trader (high frequency in this case) is using their position (X-Ray specs) to see some orders ahead of everyone else. The trader then puts in their own order ahead of all the others. Since the trader's order was first, and the market moved in that direction - guaranteed profit. Then they dump what they bought immediately and look for the next order that they can front run.

It is not front running exactly - at least from the High frequency traders perspective. They don't have clients (other than themselves). It is the exchanges which are allowing their clients to be front-run.
In that sense, HFT guys do have insider information received from exchanges that some client is about to trade.
So either definition seems OK.

High frequency trading actually facilitates more accurate pricing of securities because of the liquidity it introduces to the market. The benefit of accurate pricing is hard to explain fully without getting deeper into the economics of markets, but it's definitely there. The animosity you raised is probably due to a perceived lack of contribution (no tangible products produced). But actually, facilitating better pricing will route investment into areas that deserve it (e.g. to the guy who produces 2 potato

The value of a company doesn't change in a few milliseconds instantly. Making investment decisions on so short scales is not really investments. There has been many voices to call for a change in the way transactions are processed. Instead of a first-arrived-first-served approach, using a bigger time step, like a second or a minute (personally I don't see why a whole day would be bad) and randomizing the orders would smoothen the values and iron out the speculation.

It really looks like high-frequency trading doesn't improve the accuracy of prices. It increases its precisions but we don't really have a way to measure if it is meaningful. Converging to a precise number doesn't guarantee that this number isn't arbitrary. To be fair, it is hard to imagine that these small scale variations at very high frequency is anything more than noise.

Many institutional investors agree with you. That's why they use Market-on-Close orders [nasdaqtrader.com]. Trading at the closing cross gives everyone a fair "daily price", and it's quite possible to ignore fluctuations within the day.

Investments are indeed good and speculation is indeed bad. There is a blurry line between the two but a lot of cases are clear cut.

An investor tries to make money by choosing companies that are working in a way likely to cause a growth of its revenues. An investor chooses companies that are likely to be fashionable and to be bought by many people. The fact that its value is real or imaginary is of no concern to the speculator

High frequency trading actually facilitates more accurate pricing of securities because of the liquidity it introduces to the market.

Liquidity has value. But HFT algorithms front running trades that would already complete without them aren't providing liquidity.

The benefit of accurate pricing is hard to explain fully without getting deeper into the economics of markets,

If market pricing were to consistently deviate from actual pricing by measurable amounts this would be relevant. But HFT algorithms front running trades to arbitrage fractional cents aren't providing any benefit whosoever.

The animosity you raised is probably due to a perceived lack of contribution (no tangible products produced).

We perceive a lack of contribution because there is a lack of contribution.

But actually, facilitating better pricing will route investment into areas that deserve it (e.g. to the guy who produces 2 potatoes per unit resource instead of 1.5 potatoes).

Sure. If pricing was that far out of whack. But we don't really need to "facilitate routing investment" to the guy that produces 1.50042 potatoes instead of the resource that produces 1.50041. The only person who cares about that difference is trying to profit on that 0.00001 delta.

The sum effect of these actions is a raised social utility.

The sum effect of these actions is parasitic to actual investors leading to a diminished "social utility". (whatever that is supposed to mean.)

Seriously people, how can this be modded insightful? No social benefit whatsoever? I don't have much sympathy for Wall Street traders, especially when they lose, but even I can acknowledge that professional traders, high frequency and otherwise, have an important role to play in the marketplace: they provide liquidity. I don't know about the rest of you, but I like being able to tender my shares on the exchanges and know that there will always be a buyer, no questions asked, whenever I am ready to sell. Liq

Seriously people, how can this be modded insightful? No social benefit whatsoever? I don't have much sympathy for Wall Street traders, especially when they lose, but even I can acknowledge that professional traders, high frequency and otherwise, have an important role to play in the marketplace: they provide liquidity. I don't know about the rest of you, but I like being able to tender my shares on the exchanges and know that there will always be a buyer, no questions asked, whenever I am ready to sell. Liquidity is the oil which lubricates the engine of the marketplace and without liquidity there would be even wilder price swings, greater uncertainty and still higher unemployment. The Wall Street traders may not be saints, but credit should be given where credit is due (pun intended): liquidity is NOT worthless.

Boy have you been drinking the snake oil. Do you need eBay to close every individual auction within 100ms before you'll be confident anything will sell?

As a small value investor, I don't really care if some high frequency trader runs in front of the steam roller to snatch pennies because I don't try and beat them at their own trading games. I typically buy and sell stocks with time horizons of years, not microseconds. I value the liquidity provided more than I care about the fraction of a cent better price that I may or may not have received. In my investment career thus far I am ahead substantially (I began investing when I was 25) and I have always taken

I can think of one -- Free Market. As in free to invest, free to lose your house.

And since high-frequency trading is neither, but rather a tax-like cost extracted from every trade between third parties, what's your point?

Fascists need not apply.

Fascism: the merger of state and corporate power. It's what Free Market inevitably leads to, since it facilitates the concentration of wealth into a few hands, who can then bribe the politicians and buy out media.

And I may add that his kind of claims is made by people who "know nothing about the market", like Warren Buffet...
As a reminder, he asked for higher taxes for high incomes and to take measures against short-time speculation, which he apparently don't really like : "We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.' "

The trouble with this is it forces us to draw a very arbitrary line in the sand some place. How long to you have to hold an equity before you are investor? An hour, a day, a week, a month, a year? what?

Suppose you buy 1000 shares of Example Co on Monday and on Tuesday the CEO of Example Co is charged with fraud and the public details of the case strike you as pretty damning; should you be forced to wait to sell just because you were a more recent purchaser than someone else? Should you be denied the righ

Buffet was proposing 3 months IIRC. Forbidding a sale of something you bought less than three months ago.

In your example, well you have made a bad investment decision buying from Example Co and it is fair you get punished by trusting crooks. What would be unfair would be that investors that have offices closer to the stock exchange market would get more milliseconds to sell stocks.

If you can't sell in the second your stocks, you will take more time to examine the case, try to understand more deeply wha

Suppose you buy 1000 shares of Example Co on Monday and on Tuesday the CEO of Example Co is charged with fraud and the public details of the case strike you as pretty damning; should you be forced to wait to sell just because you were a more recent purchaser than someone else?

Yes, because such a lawsuit is one of the risks you accepted when you bought the stock.

A bigger problem is the possibility of an acute need for money during your can't-sell -period.

Actually I'm pretty sure its a bot. It takes a single trollish statement and waits for a reply, then uses the reply in a stock insult (your blank is a blank) and then throws out the same stock endings (why do you cower? pathetic). It never even changes the spacings or misspells the insult occasionally like a human would. It actually isn't even a very good bot, it reminds me too much of ELIZA.

As for TFA why isn't the board in jail? oh that's right, we only throw peons in there. my bad. But if you want to

No, he's correct about that. High frequency trading and technical analysis are trading strategies that don't depend upon the underlying company to make money. High frequency trading is worse because of the way that it works.

Unlike technical analysis which relies extensively on group think, high freqency trading, relies upon the knowledge of what the future price for a share is going to be and then slams in a trade that will, assuming it gets there in time, result in guaranteed profit.

It's basically a continuation of a practice which used to be pretty common. Stock brokers would have access to the price of company shares the next day and would be able to act upon that information in a way that the general public wouldn't.

The TL;DR version, high frequency trading is parasitic and needs to be stopped for the good of the market.

high freqency trading, relies upon the knowledge of what the future price for a share is going to be and then slams in a trade that will, assuming it gets there in time, result in guaranteed profit.

(emphasis mine.)

The guaranteed profit part is only a very small subset of HFT.

Most of the time it only takes part in transactions which has some expected gain, but by no means always makes said gain. By doing this millions of times per day, in theory, it averages out.

Just like a bank will borrow people's money and loan it other people, at a profit, thus making the market more liquid by matching borrowers and sellers and taking the risk on themselves; these HFT traders buy and sell stock, providing liquidity and taking on risk themselves for a small profit (which gets multiplied by a large factor when done million times)

"Liquid" means easier to buy and sell, yes? For example, your house may be worth $250K, but if I just walked up and offered you $250K, you probably wouldn't take it because you don't really want to sell it right now. If I was determined to have your house, I'd have to offer you enough of a premium to make you sell it anyway. Having lots of people buying and selling means that there's always someone willing to buy or sell at a reasonable price if you're a real investor ra

How can anyone have access to a company's share price in the future??? Do you have even the slightest understanding of what you're talking about?
Longer latency to exchange, for real trader vs HF trader. Seriously, that gives HF a few milliseconds view into the "future" because he knows what price is going to be offered immediately after his trade.

You and most of/. really have no clue how market making works, HF or not. Some people have reasons to buy derivatives (futures and options). A coffee roaster might want a call option on raw beans to protect themselves from price rises, and likewise, a coffee grower might want a put option to protect against falling prices. If you estimate the volatility of the underlying asset's price, you can calculate a theoretical fair price for a derivatives.

Now suppose I use my model to calculate a particular option is worth $10. If the market is wide open, I could offer to buy it for $5 or sell it for $15 - making a market with a spread of $10. In this situation, I could make $5 of profit, or "edge", on each option I trade. But you might decide you can afford to quote $6/$14 - now you'll pick up all the trades with an edge of $4. I won't want you to get all the action, so I'll have to quote inside your spread - maybe $6.50/$13.50 - and other people will get in on the action. As the number of market makers increases, the spreads tighten, and the people who actually have a purpose for the options get a better deal.

The exchanges take a percentage of each transaction, so they want to attract as many traders as possible. Part of this is offering narrow spreads on derivatives. To make the spreads narrow, they will try to attract market makers. This is often done by offering rebates on fees to people quoting sufficiently narrow spreads for a high proportion of the time.

In a liquid market, the spreads will be very narrow, and thus the edge on each transaction will be tiny. As a market maker, you need to be making enough to pay your traders and software developers, so you need to make sure you get as many of the trades as possible. Latency is the killer, so you need to do anything you can do to keep it down. Co-locating your system at the exchange costs you money for rack space, but it will give you lower latency, and therefore more chance of being first in and getting the trades. Everyone does this now, so it's simply a cost of business if you want to make money. Beyond this, you need to employ smart developers and IT people to keep making your system faster. Everyone is doing this now, so at it's like an arms race - you have to keep getting faster or you will lose out and not get the trades you need to make money.

The upshot of this for everyone else is that derivative prices are fairer - when you want to hedge, you won't be incurring much cost over the theoretical fair price of the instrument.

You and most of/. really have no clue how market making works, HF or not. Some people have reasons to buy derivatives (futures and options). A coffee roaster might want a call option on raw beans to protect themselves from price rises, and likewise, a coffee grower might want a put option to protect against falling prices.

Coffee roasters do not have differing needs every 100ms. In fact, the coffee roaster taking the hedge makes its major business decisions (which it needs to hedge for) less than once per day so in theory the customer would be quite happy with a trading frequency several orders of magnitude slower. If "liquidity" blew out from 100ms trades to hourly trades or worse, it is the banks and hedge funds that would blow up (taking the world with it), not Kenco and Nescafe. The upshot is that the "customers" of in

Whatever frequency of trading you're talking about, it's more expensive for the farmer/factory to sell/buy if the market is illiquid. Sure, most of the trading by far is too fast for Nestle to notice, but the guys they just bought a huge load of coffee from need to distribute the risk too.

And guess what, they also don't need to trade every 100ms. Heck, if you want to trace it all the way back, you can be pretty dang sure that the farmer doesn't make sales every 100ms either! The "liquidity" is several orders of magnitude faster than any business in the supply chain would notice; making the trades "high liquidity" (which also makes the tender times short) gives no advantage to the business customer but certainly does give the bank an advantage -- the bank does want higher liquidity so it ca

They don't need to, but why stop them? They're only trading amongst themselves. The customer gets a better price when he decides to come in.

Wrong on both counts. As the banks have fastest access, tiny transaction times (high liquidity) ensures the banks get first dibs on any better prices -- so in fact it ensures the customer gets a worse price because if there is a better one, the bank will take it and then offer the worse price to the customer. They are also not only trading amongst themselves -- they are using the implicit hedge that the taxpayer will insure their losses lest the bank go under.

Not a false experiment. The volatility is caused by illiquidity. No market makers, who always trade faster than farmers/factories, thus prices are wide and intransparent. Farmer comes in, loses a wider spread. Simple.

As the banks have fastest access, tiny transaction times (high liquidity) ensures the banks get first dibs on any better prices -- so in fact it ensures the customer gets a worse price because if there is a better one, the bank will take it and then offer the worse price to the customer. They are also not only trading amongst themselves -- they are using the implicit hedge that the taxpayer will insure their losses lest the bank go under.

Their customers, who are by and large not idiots, would obviously leave them if this were the case. Yet, they do not leave. They realize the simple truth that Goldman is extremely good at what they do and that includes helping customers make money.

Pyite: "Their customers, who are by and large not idiots, would obviously leave them if this were the case. Yet, they do not leave. They realize the simple truth that Goldman is extremely good at what they do and that includes helping customers make money."

Pyite is right, GS hasn't been robbing their customers. They have been robbing from everyone ELSE, making money for themselves and (sometimes) their customers. So yes, GS is good at making money

"...[the SEC] charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter"...that sounds like robbing and defrauding their customers...

That's my thought. There's an awful lot of insider trading and trading on future prices that goes on at hedge funds. There may or may not be any that do it via legitimate smarts, but there's a lot of them that do things which intentionally distort the market.

I'd personally feel very differently if Wall Street was anything other than a bunch of speculators that are fine losing all of your money even as they give themselves bonuses for handling the money.

"Securities and Exchange Commission today announced that Goldman, Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse."

This was this year [huffingtonpost.com]. Google is your friend. You don't "settle" out of court unless you have done something wrong. In my mind they should have paid more.

Ten years for just stealing a little code.
Damn you would think he gambled with investor funds on risky phantom products that sent the whole economy into a tail spin.
But I guess that's what they call their business model.

To steal, one must take something from another's possession, and deprive them of its use. What he did was illegal, as the jury found. However, if all he did was copy the code, as opposed to destroying the originals and all versioned/archived/backed-up copies, then he didn't steal anything. The MAFIAA (Music and Film Industry Associations of America) would like you to think that what this man did was steal, because it's a short hop to apply the same logic from code to music and film. They'd be wrong.

Because for the conversion to take place *someone else* must have possession of that property.

For example:

SCO sells licenses for SCO Unix. They do this on behalf of Novell.They are to remit 100 percent of the fee to Novell, and Novell is to give them 5 percent as the seller's fee.SCO proceeds to hold on to every fucking license fee, including the ridiculous ones they sold to Microsoft and Sun.SCO holds on to these through bankruptcy. Using t

You see, I can wait until your at work and barrow your lawn mower and other things, take a loan out using them as collateral, then give them back without you ever knowing it or me starting them or anything. That would be the same ordeal.

Another theft by conversion might be where you give me money to invest in a certain way, I in turn invest it differently making more then you expected and keep the differences. On the surface, You got what you expected and your money b

No, you _stole_ the lawnmower. Taking without permission is theft, whether I am there to see it or not.

If you're my buddy and you take my car out for a ride, without telling me, and you get stopped, and the cops call me up to ask if you had permission (since you know me) I would well be within my rights to tell them "no, he stole it" and away you go. I may be an asshole, but you stole the car.

But in your example, not only do you steal my fucking lawnmower, you use it to commit fraud upon the fucking bank.

high frequency trading demands you have the screamiest servers the shortest fibre optic hop away from wall street. meaning it turns what should be an egalitarian marketplace of equals into one where those with the most power and resources are able to extract a tax of sorts on regular traders by engaging in high speed tricks

just put a "heartbeat" into the market: all trades operate on a FIFO queue that is released on a regular interval: every 3 seconds, every second, every 10 seconds, every 500 milliseconds, whatever: the point simply being that no trades can operate faster than this "heartbeat", thereby putting all trades on an equal footing

otherwise, the stock market will be abused by its richest players. when that happens, small time and mom and pop stock market traders will feel abused, and opt out, and the market will ossify into corruption

the point of a well-regulated marketplace is to keep the marketplace fair and healthy and a place of equals. so deny the powerful this unfair leverage and unfair ability to siphon off a tax on all other traders just by doing little fast tricky trades that have no real value whatsoever other than to take money from the slower smaller players

i'm showing my age, but there was a mod some maniac made over ten years ago of id's original doom fps. you were let loose in a level full of monsters, and each monster correlated with a process running on your computer. when you shot a monster (with a shotgun, preferably), the process associated with that sprite was terminated as well. brilliant, and insane

now i want to see someone write a mod where you execute trades instead of processes. that would brilliant and insane x10

The Taiwan and Korea markets are like that, the only thing such delays achieve is to decrease the total amount of shares traded in a day, hence reduces the overall market value and shifts wealth to other markets that do allow continuous unfettered trading.

What you don't realise is that a great deal of shares/commodities these days are being traded in dark pools and mini electronic markets, those traditional NYSE or NASDAQ style exchanges are looking to be a thing of the past and only being used as a reporti

you are basically advocating for shady marketplaces that are rigged by their most entrenched players. if the markets are not egalitarian, the markets are abusive, and you are cursing the entire concept of trading to the realm of corruption, which will decrease the overall market value a heck of a lot more than what taiwan and korea are suffering, i assure you

for a market to be truly free, that is, a meeting place of equals, it must be in the full light of day and be highly regulated. truly "free" marketplaces, that is, without any regulation at all, are, as a rule, dominated, abused, and taxed by their largest most powerful players

a marketplace that is regulated and transparent and well-policed and well-understood, is a marketplace that attracts investors with confidence and trust in what they are getting into. your dark marketplaces meanwhile are more a deal of who you know. the definition of nepotism and all manner of ills that befall fools that get involved in such financial chicanery

your way is the way of financial doom. you are ignorant of financial history. the fate of such dark marketplaces is well understood and oft repeated throughout history

I think you misunderstood my point, all the examples I gave such as separate mini markets, stealth exchange and clearing pools are all elements that existed in past markets that inevitably all failed.

The idea is if you allow people the freedom to choose from these options over time such options will fail - that is a certainty. The reason for failure centers around the fact that as they reduce the overall efficiency (true price) of the market, this results in a less profitable market.

Your statement about the Taiwan and Korea markets is nonsensical. Why does using a heart beat type trading decrease the total amount of shares traded in a day? And why would that have anything to do with the overall market value?

Regarding the dark pools, if you thought about it for a second, you would realize that those dark pools are partially caused by exactly the high frequency trading you support. People do not want to suffer the tax of the HFTs on the big exchanges, so they trade outside of them in dar

We could make the police a lot more efficient too. Remove all the beurocratic requirements and protections; let them do wiretaps without a warrant, don't allow people to have lawyers, allow them to plant evidence, and torture suspects into confessing their crimes. Take away the presumption of innocense too. I guarantee that the police will be much more efficient at prosecuting people and getting them thrown in jail if we do that. Let the police be as

I read this book, and after was astounded with how true it rings, not because of the money I earned (I don't even invest), but because of the insights it provides into the greediness and irrational nature of the market.

To summarize the book, buys stocks based on what you think their value is, which actually requires doing a value analysis on the stock and buying when it is undervalued, and selling when it is overvalued, as to just getting sucked into the latest get rich quick stock or bond at the height of its balloon, only to have it pop.

Seeing as you're promoting a book and telling us how valuable it is, and that it's out of print, are you Seth A Klarman? or somebody sitting on a pile of copies of his book?

The 1 star reviews in amazon (including one by somebody who has read a library copy) make the interesting suggestion that the mythologising of the book gives it its value, rather than the content itself. Sounds like Seth A Klarman is making his money not from his wise investment strategies but from selling books which cost him 10 dollars

To summarize the book, buys stocks based on what you think their value is, which actually requires doing a value analysis on the stock and buying when it is undervalued, and selling when it is overvalued, as to just getting sucked into the latest get rich quick stock or bond at the height of its balloon, only to have it pop.

The problem is that the market can be wrong longer than you can be right. That is to say it doesn't help if you sit on a stock that is constantly undervalued, you never get the "real" value unless you buy it out and go private which is not an option for 99.999% of us. The question is what brings markets to say "Hey, this stock is vastly underpriced, buy buy buy." or "Hey, this stock is vastly overpriced, sell sell sell." because unless you're doing it for the dividends you're sooner or later going to sell i

high frequency trading demands you have the screamiest servers the shortest fibre optic hop away from wall street. meaning it turns what should be an egalitarian marketplace of equals into one where those with the most power and resources are able to extract a tax of sorts on regular traders by engaging in high speed tricks

Why should a market be egalitarian in your sense? You could, like anyone else, always spend for the faster link.

High frequency trading should be a crime. It does not contribute one iota to the original goal of the stock market; however it sucks wealth from it - more precisely, from long-term shareholders. Goldman-Sachs and the like are nothing but leeches. (GS is a leech, in more ways than one, actually)

i don't understand your post. you agree with my description of the problem, but call my solution bullshit. why? because you shouldn't fight corruption, you should just accept it? is that your ignorant attitude?

is the fact that we have apparent non-experts deciding whether what he took was in fact proprietary, and the case is sealed so we cannot judge for ourselves. On the other hand, if what he took was legitimately open source, how comes it he couldn't have downloaded that elsewhere and saved himself a trial?

I've met lots (well, maybe not lots but enough) of people who have stolen code from past and present employers for their own gain or for use at their new job. Sometimes the new employer welcomes them in with this gift hoping that if anyone gets caught they can deny they knew what was going on.

All of these people have been incredibly arrogant to the point of knowing that they were never going to get caught because they were just smarter than anyone else. And,

From the information in the article, I'm not sure I understand what the case is based on? If the code was open-source, doesn't he have license to use it?

Are they claiming that the "open source" code is actually proprietary and cannot be used by anyone? Or that just their employees cannot use it? Or that the contract between him and the employer somehow prevents licensing the open source code? The article claimed there was no question that he violated the confidentiality agreement. Or did he disclose some pr

I don't quite understand much of it either... as far as I can tell nothing about it should stems to more than a civil matter. The only thing I can think of is either criminal copyright infringement, or theft of trade secrets.

I would definitely enjoy a discussion with someone who understands what happened her better than I do... learning is fun!

Read the related articles. I believe that the one I submitted a month or so ago has the details. In brief, the programmer developed the code and then took it with him. It seems to be a fairly cut and dried case of theft. He was paid to produce the code by Goldman Sachs. They sealed the court room because they did not want their code and the underlying methodologies that went into the development of the code being exposed to the public.

.. on all these high frequency trading systems. Most of them achieve high speed, low latency trading by submitting batches of trade requests to the electronic exchanges. Somewhere in the transaction, the decision is made to go ahead with a subset of the trades. The rest of them are cancelled. This borders on a DoS attack.

If I pulled some nonsense like this with my ISP or other service provider, they'd have something in their TOS to throw me off the system for making bogus requests.

If I pulled some nonsense like this with my ISP or other service provider, they'd have something in their TOS to throw me off the system for making bogus requests.

I assume you're referring to "quote stuffing", which the SEC is pursuing aggressively [wsj.com]. Just like your ISP. Also just like your ISP, it's not always clear-cut whether high-volume activity is reasonable (market making with rapid quote changes, or an Ubuntu.torrent) or unreasonable (intentional quote stuffing, or the latest **AA movie.torrent).

Why do they want to get rich in the first place? They don't stop sucking money out of everything after getting more money can in any way affect their physical comfort. This means, they need money for something other than obtaining comfort, and observation shows that the only other thing they do is exercising power over other people in various destructive ways.

The only possible explanation is, they derive pleasure from suffering of others -- and not just a small number of people but enormous masses of people